OMERS acquires partial ONPATTRO royalty streams from Arbutus for US $20M

Arbutus Biopharma Corporation (NASDAQ: ABUS) has closed the sale of part of its royalty interest on future global net sales of ONPATTRO™ (patisiran), an RNA interference (RNAi) therapeutic currently being sold by Alnylam Pharmaceuticals, Inc. (NASDAQ: ALNY) to OMERS.

Under the terms of the LNP license agreement with Alnylam for ONPATTRO, Arbutus is entitled to tiered royalty payments on net sales of Onpattro ranging from 1.00% – 2.33% after offsets, with the highest tier applicable to annual net sales above $500M. This royalty interest has been sold to OMERS, effective as of January 1, 2019, for US $20 million in gross proceeds before advisory fees. OMERS will retain this entitlement until it has received US $30 million in royalties, at which point 100% of the entitlement will revert to Arbutus.

In addition to this royalty from the Alnylam LNP license agreement, Arbutus is also entitled to a second, but lower, royalty interest on net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas Therapeutics. The royalty from Acuitas is not part of the royalty sale to OMERS.

With its investment in ONPATTRO, OMERS is the second Canadian pension fund that ventured into drug royalty investment recently.

In May 2019, Canada Pension Plan Investment Board’s (CPPIB) acquired a portion of LifeArc’s royalty interests on worldwide sales of Keytruda®* (pembrolizumab), MSD’s anti-PD-1 therapy, for approximately US $1.297 billion.

Roivant Sciences, Ltd, a portfolio company of SoftBank Vision Fund, is a major shareholder of Burnaby BC based Arbutus Biopharma.

photo credit: Arbutus

News Release

Arbutus Sells Part of its ONPATTRO™ (patisiran) Royalty Interest to OMERS

– Arbutus to receive $20 million in gross proceeds before advisory fees while retaining significant downstream economics
– Runway extended with non-dilutive capital

WARMINSTER, Pa., July 02, 2019 (GLOBE NEWSWIRE) — Arbutus Biopharma Corporation (Nasdaq: ABUS), an industry-leading Hepatitis B Virus (HBV) therapeutic solutions company, today announced the sale of part of its royalty interest on future global net sales of ONPATTRO™ (patisiran), an RNA interference (RNAi) therapeutic currently being sold by Alnylam Pharmaceuticals, Inc. (Nasdaq: ALNY) (Alnylam), to OMERS, the defined benefit pension plan for municipal employees based in the Province of Ontario, Canada. Morgan Stanley & Co. LLC acted as sole structuring agent on the transaction.

ONPATTRO is the first-ever RNAi therapeutic to be available for patients and was approved by the U.S. Food and Drug Administration (FDA) for the treatment of hereditary transthyretin-mediated (hATTR) amyloidosis with polyneuropathy on August 13, 2018, and by the European Commission for the treatment of hATTR amyloidosis in adults with stage 1 or stage 2 polyneuropathy on August 30, 2018. ONPATTRO utilizes Arbutus’s lipid nanoparticle (LNP) technology, which was licensed to Alnylam in November 2012.

“ONPATTRO represents an important advance for patients with hATTR amyloidosis. This monetization opportunity is valuable for us as it both extends our runway with non-dilutive capital and maintains valuable downstream royalties,” stated Michael McElhaugh, Arbutus’s Chief Business Officer.

Under the terms of the LNP license agreement with Alnylam for ONPATTRO, Arbutus is entitled to tiered royalty payments on net sales of Onpattro ranging from 1.00% – 2.33% after offsets, with the highest tier applicable to annual net sales above $500M. This royalty interest has been sold to OMERS, effective as of January 1, 2019, for $20 million in gross proceeds before advisory fees. OMERS will retain this entitlement until it has received $30 million in royalties, at which point 100% of the entitlement will revert to Arbutus. In addition to this royalty from the Alnylam LNP license agreement, Arbutus is also entitled to a second, but lower, royalty interest on net sales of ONPATTRO originating from a settlement agreement and subsequent license agreement with Acuitas Therapeutics. The royalty from Acuitas has been maintained by Arbutus and is not part of the royalty sale to OMERS.

About Arbutus
Arbutus Biopharma Corporation is a publicly-traded (Nasdaq: ABUS) biopharmaceutical company dedicated to discovering, developing, and commercializing a cure for patients suffering from chronic Hepatitis B infection. Arbutus is developing multiple drug candidates, each of which have the potential to improve upon the standard of care and contribute to a curative combination regimen. For more information, visit www.arbutusbio.com.

About OMERS
Founded in 1962, OMERS is one of Canada’s largest defined benefit pension plans, with $97 billion in net assets as at December 31, 2018. A jointly-sponsored pension plan, with 1,000 participating employers, OMERS invests and administers pensions on behalf of almost half a million active and retired members. OMERS members include union and non-union employees of municipalities, school boards, transit systems, electrical utilities, emergency services and children’s aid societies across Ontario. Contributions are funded equally by members and employers. OMERS has employees in Toronto, London, New York, Amsterdam, Luxembourg, Singapore, Sydney and other major cities across North America and Europe – originating and managing a diversified portfolio of high-quality investments in public markets, private equity, infrastructure and real estate. For more information, please visit www.omers.com.

Contact Information

Investors

William H Collier
President and CEO
Phone: 604-419-3200
Email: ir@arbutusbio.com

Pam Murphy
Investor Relations Consultant
Phone: 604-419-3200
Email: ir@arbutusbio.com

Ted Liu

Ted Liu, M.Sc. (Mining, Queen's), MBA (Finance, Toronto), is the Editor of Private Capital Journal, CanadaMetals.ca, TechWire.ca, and the former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, having most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA).

Ted is the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, Canada's most sophisticated and advanced all private capital and public market financing database.